Investment Trust Analyst: Dividend Hero Bankers celebrates 51yrs of rising dividends with a huge increase


#1

Originally published at: https://whichinvestmenttrust.com/investment-trust-analyst-dividend-hero-bankers-celebrates-51yrs-of-rising-dividends-with-a-huge-increase/

As it marks 51 years of ever rising dividends, we take a closer look at how this 135 year old trust is managed and consider its future prospects. Fast Facts Rising dividend every year since 1966 Dividend last cut during World War two Invests globally in developed world economies with a value investment style and…


#2

I fund it hard to get excited about Bankers. It is just a little bit too dull for me. But hey, in saying that I can also see that dull but relatively ‘safe’, for want of a better word would appeal to investors who are a little bit more cautious than I am.

I’m more turned on by your Scottish Mortgages of this world.

I suppose my comment is just a bit of a moan; wondering how people who invest in Bankers feel about it, do they love it?


#3

I loved it. A great way of achieving international diversification with low fees which has done well for me over many years. (SM have had a great run during the tech boom but I prefer steady eddies for the long term).

BUT

I don’t hold it at present because:

The 2% yield isn’t much from a Trust that says it pays attention to income and doesn’t represent the real net income from the underlying shares because like most trusts they charge over half of their expenses to capital - so they are effectively just using our investment to pay for our dividends!

The discount is currently minimal which is unusual and it has sunk as low as 15% over the past decade.

Note that Scottish Mortgage charge 75% of their running & finance costs to capital and if they didn’t their revnue return would be negative. All of your return and more comes from the capital growth.

MB


#4

Yeah I agree with you there @mickbeaman, Bankers doesn’t excite me much either. Only thing I would say though is it is the the type of investment I would put my mother in because I see it as less risk. I worry about investing in tracker funds because they indiscriminately buy the market, Bankers carefully buys the world and does better than trackers. Maybe if I was older I’d buy Bankers, I’m not sure.


#5

If you had held Bankers over the long term that small 2% dividend would have grown to be 4% or 5% on your original investment. This while it is taking relatively less risk than other funds and the value of the shares have grown substantially. This is why it appeals to me.

I don’t want the top performing funds, i wants the funds that give me more than I can get from a Bond fund, from the Bank and that makes me a profit over and above inflation (which is a real killer for me), while not taking big risks to top the performance tables, risking my money. This is what Bankers does.

Keep on giving me more of this please!


#6

Yeah I agree with your analysis of Bankers @geordieboy It has delivered what it promised to deliver and more. It’s not a shoot the lights out type of fund, more of a steady-Eddy that will be like the tortoise beating the hare over the long run.

My parents hold Bankers in their portfolios and it’s delivered handsomely for them.


#7

I don’t really get that! I have held it off and on for at least 20 years and while the divi has indeed kept up with inflation but I could have got that from lots of funds especially over the last five years. Rather, my real returns from it have come from buying in when the discount was high and selling out while low; while enjoying having a cheap and intelligent geographic diversifier at a time when Global ETF’s have become over concentrated in US stocks.

Now the discount is at a historic low so if there is any reversion to the statistical mean it will probably be a poor bet relative to the market on, say, a ten year view. I would buy back in if the discount returned to double digits.

Take a look at the historic discount chart on the HL website, link below, and adjust the time frame for a decade…


#8

Sounds like you have had the best approach to investing in Bankers @mickbeaman